Court rejects Regional Hospital buyback bid

PORTSMOUTH — A non-profit entity that oversees Portsmouth Regional Hospital has lost its latest bid to buy the facility back from its corporate owner, Hospital Corporation of America.

The New Hampshire Supreme Court on Tuesday issued the latest opinion in a seven-year legal battle between HCA and the Foundation for Seacoast Health, the group formed to monitor the hospital after it was sold to HCA.

The Foundation argues that a corporate restructuring in 1999 should have triggered a provision in HCA's contract that would have allowed the non-profit to buy the hospital back.

However, that contention has been shot down in Rockingham Superior Court. In the most recent ruling, which came in 2011, Judge Kenneth McHugh determined HCA is indeed guilty of breaching its contract, but the violation isn't sufficient enough to trigger the buy-back clause.

The Supreme Court largely upheld McHugh's ruling this week, denying an appeal from the Foundation for Seacoast Health. The unanimous 5-0 decision was rendered following oral arguments in May. The Supreme Court also reversed an order requiring HCA to pay a portion of the foundation's litigation fees.

Daniel C. Hoefle, chairman of the foundation's board of directors, said Tuesday the group is disappointed in the decision.

“We took this action as a result of our the foundation's obligation to uphold the community's rights regarding the ownership and operation of the hospital and because of our fiduciary obligation for oversight over the hospital operations,” he said.

He declined to comment on whether the foundation has any remaining legal options, although a challenge to the U.S. Supreme Court isn't possible.

HCA has operated Portsmouth Regional Hospital since it acquired the facility from hospital trustees in 1983.

The Foundation for Seacoast Health first went to court in 2006 to try to buy the hospital back after a group of private investors took ownership of HCA's stock. The Supreme Court denied the foundation's request, but left open the possibility that a corporate restructuring in 1999 should have triggered the contract's buy-back provision.

The hospital's assets were shuffled that year, but the foundation wasn't notified. As a result, HCA was ordered two years ago to "undo" the 1999 transaction by taking any steps necessary to put the hospital back in the same direct corporate chain that it was before the changes took effect.